COLUMBUS, Ohio--(BUSINESS WIRE)--Oct. 4, 2017--
Washington Prime Group Inc. (NYSE: WPG) today announced several
financial activities as part of its portfolio construction and capital
allocation strategy.

Lou Conforti, CEO and Director stated: “As previously stated, within our
Tier 2 portfolio there are certain assets which, save for the fact that
they are overleveraged, exhibit Tier 1 characteristics. As we recently
illustrated with the discounted payoff of the mortgage loan secured by
Mesa Mall, we are opportunistic in such situations, and Southern Hills
Mall is yet another example. Assuming Cottonwood Mall, Mesa Mall and
Southern Hills Mall are ultimately reclassified as Tier 1 assets, only
15% of the Company’s net operating income is represented by Tier 2
assets, of which about half are unencumbered.”

Conforti added: “We have addressed all 2017 mortgage debt maturities and
now have nearly $316 million of net operating income being generated
from our unencumbered properties, or approximately 57% of total property
NOI. Additionally, after the completion of these strategic transactions
and assuming the reclassifications to Tier 1 discussed above, over 85%
of the unencumbered NOI is from Open Air and Tier 1 enclosed properties.
Our strategic efforts to reduce leverage has positioned WPG as one of
the best within the U.S. Regional Mall REIT sector from a leverage
standpoint, great progress from where leverage levels were a year ago.
We cannot think of a better way for us to demonstrate our commitment to
an investment grade balance sheet.”

Mortgage Loans

On October 4, 2017, the Company signed a definitive agreement to retain
Southern Hills Mall, located in Sioux City, Iowa. As part of the
definitive agreement, the property, along with the $99.7 million
mortgage loan secured by Southern Hills Mall, is expected to be
transferred to the lender, followed by the anticipated sale of the
property by the lender to a wholly-owned affiliate of Washington Prime
Group for a purchase price of approximately $55.0 million. The Company
will recognize approximately $45.0 million in gain on debt
extinguishment related to the transition.

This accretive financial transaction is expected to result in the
Company retaining Southern Hills Mall, a dominant enclosed retail venue
in a secondary market. The debt yield on the mortgage loan is
approximately 7.5% with a yield on the anticipated purchase of
approximately 13.5%. The transaction is expected to close this month,
subject to due diligence and customary closing conditions.

As the only enclosed regional shopping center within a 90-mile radius,
Southern Hills Mall serves the growing Sioux City market and western
part of the state. Sioux City is the fourth largest city in the state of
Iowa, and the market consistently ranks as one of the top small markets
for businesses.

On October 3, 2017, the $40.0 million mortgage loan secured by Valle
Vista Mall, located in Harlingen, Texas, was extinguished upon the
property transition to the lender on October 3, 2017. The Company will
recognize approximately $27.0 million in gain on debt extinguishment
related to the transition.

On October 2, 2017, the Company repaid the $99.6 million mortgage loan
on WestShore Plaza, located in Tampa, Florida, adding the Tier 1
enclosed property to the unencumbered pool of assets.

Dispositions

On October 4, 2017, the Company signed a definitive agreement to sell
Colonial Park Mall, located in Harrisburg, Pennsylvania, to an
unaffiliated private real estate investor for a purchase price of $15.0
million. During the nine months ended September 30, 2017, the Company
expects to record a non-cash impairment charge of approximately $20.9
million related to the sale of Colonial Park Mall.

About Washington Prime Group

Washington Prime Group Inc. is a retail REIT and a recognized leader in
the ownership, management, acquisition and development of retail
properties. The Company combines a national real estate portfolio with
an investment grade balance sheet, leveraging its expertise across the
entire shopping center sector to increase cash flow through rigorous
management of assets and provide new opportunities to retailers looking
for growth throughout the U.S. A trademark application has been filed
with the U.S. Patent and Trademark Office for the name “Washington Prime
Group” and is currently pending. Learn more at www.washingtonprime.com.

Forward-Looking Statements

This news release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995 which
represent the current expectations and beliefs of management of
Washington Prime Group Inc. (“WPG”) concerning the proposed
transactions, the anticipated consequences and benefits of the
transactions and the targeted close date for the transactions, and other
future events and their potential effects on WPG, including, but not
limited to, statements relating to anticipated financial and operating
results, the company’s plans, objectives, expectations and intentions,
cost savings and other statements, including words such as “anticipate,”
“believe,” “confident,” “plan,” “estimate,” “expect,” “intend,” “will,”
“should,” “may,” and other similar expressions. Such statements are
based upon the current beliefs and expectations of WPG’s management, and
involve known and unknown risks, uncertainties, and other factors which
may cause the actual results, performance, or achievements of WPG to be
materially different from future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors
include, without limitation: changes in asset quality and credit risk;
ability to sustain revenue and earnings growth; changes in political,
economic or market conditions generally and the real estate and capital
markets specifically; the impact of increased competition; the
availability of capital and financing; tenant or joint venture
partner(s) bankruptcies; the failure to increase mall store occupancy
and same-mall operating income; risks associated with the acquisition,
development, expansion, leasing and management of properties; changes in
market rental rates; trends in the retail industry; relationships with
anchor tenants; risks relating to joint venture properties; costs of
common area maintenance; competitive market forces; the level and
volatility of interest rates; the rate of revenue increases as compared
to expense increases; the financial stability of tenants within the
retail industry; the restrictions in current financing arrangements or
the failure to comply with such arrangements; the liquidity of real
estate investments; the impact of changes to tax legislation and WPG’s
tax positions; failure to qualify as a real estate investment trust; the
failure to refinance debt at favorable terms and conditions; loss of key
personnel; material changes in the dividend rates on securities or the
ability to pay dividends on common shares or other securities; possible
restrictions on the ability to operate or dispose of any partially-owned
properties; the failure to achieve earnings/funds from operations
targets or estimates; the failure to achieve projected returns or yields
on development and investment properties (including joint ventures);
expected gains on debt extinguishment; changes in generally accepted
accounting principles or interpretations thereof; terrorist activities
and international hostilities; the unfavorable resolution of legal
proceedings; the impact of future acquisitions and divestitures; assets
that may be subject to impairment charges; significant costs related to
environmental issues; and other risks and uncertainties, including those
detailed from time to time in WPG’s statements and periodic reports
filed with the Securities and Exchange Commission, including those
described under “Risk Factors”. The forward-looking statements in this
communication are qualified by these risk factors. Each statement speaks
only as of the date of this press release and WPG undertakes no
obligation to update or revise any forward-looking statements to reflect
subsequent events or circumstances. Actual results may differ materially
from current projections, expectations, and plans, if any. Investors,
potential investors and others should give careful consideration to
these risks and uncertainties.